Rules for enforcing carbon emissions limits on new cars have been agreed by the Environmental Committee of the European Parliament, but already the limits and their enforcement are coming under fire by both environmental campaigners and the car industry.

By and large, the agreement panned out as had been expected. Car makers will now have to achieve a fleet average of 95g/km of Co2 by 2020, and a draft agreement on a limit of between 68-78g/km has been agreed in principle for 2025, with a final decision on that limit deferred until 2017.

The new limits will force car manufacturers to cut an average of 35g/km of Co2 from their fleet between now and 2020 from the current agreed limit of 130g/km.

It’s a significant drop in overall emissions, but somewhat controversially, the EU has agreed that the system of ‘super-credits’ will remain in place, allowing car makers to count vehicles emitting less than 35g/km (effectively only electric vehicles) to count extra towards the average.

In other words, for every electric car a manufacturer makes, it will be allowed to count that car as 1.3 cars agains the emissions of a larger, more polluting vehicle.

The measure had been introduced, and is being kept on, because it is believed to offer a spur to car makers’ efforts to develop electric vehicles with mass-market appeal and also because it potentially offsets some of the expensive research and development costs of such vehicles at a time when the European car market is experiencing the worst slump in its history.

Greenpeace has been lukewarm in welcoming the decision by the Environment Committee MEPs, with Greenpeace’s EU Transport Policy Director Franziska Achterbeg saying that “European parliamentarians have shown foresight by backing standards for 2025. This timeline would give carmakers enough time to clean up their act. But the range they indicate is still too high to truly drive investments in technological innovation. Greenpeace is calling for a target of no more than 60g CO2/km in 2025.”

On the subject of the decision to retain the super-credits system, Ms Achterberg was sharp in her criticism of the European Parliament, saying that “MEPs have fallen into the trap set by carmakers claiming that standards can only be met if they are riddled with loopholes. But carmakers have cried wolf before, proving themselves wrong by innovating faster than they said they could.”

Greenpeace is accusing the EU of allowing the car makers to achieve the set emissions limits by “creative accountancy,” rather than technological innovation.

Jason Reakes, BMW UK’s Head of Government Affairs, thinks though that the retention of super-credits is a useful boon to the potential of electric cars, and that it means that the EU and car makers are at least listening to each other. “We need joint action and aligned strategic agreement between government and industry to move the electromobility agenda forward.

Super-credits will certainly play an important role in sending the right signal and supporting the activities of those companies that are investing very significantly in bringing electric vehicles onto the market as soon as possible, thereby increasing the attractiveness and accelerating the take-up of EVs (Electric Vehicles) amongst potentially interested customers.

When you look at the levels of super-credits in countries such as the US and China, it becomes clear that Europe, if it is determined to retain its competitiveness in this field on the global stage, must be equally ambitious and supportive in its encouragement of the early EV market.”

The retention or rejection of super-credits is creating something of a rift in the European car making world. Earlier this year, Volkswagen, Europe’s largest and richest car maker, said that it would meet the proposed 2020 limit of 95g/km without recourse to super-credits, an impressive boast when you remember that the VW empire includes such high-emissions brands as Lamborghini, Bentley and Bugatti.

Looking beyond the purely environmental side, the European Automobile Manufacturers’ Association (ACEA) was gloomy about the financial cost of meeting the 2020 and 2025 limits, at a time when most car makers are dealing with financial turmoil and, in many cases, red-tinged balance sheets.

“This year has also got off to a worrying start, as our most recent new car registration figures show that the first quarter of 2013 is the worst first quarter on record” said ACEA Secretary General Ivan Hodac. “In this difficult economic context and given the fact that the regulatory pressure in Europe is already far higher than in our major competitor regions the outcome of the vote sends a worrying signal for the future of the industry in Europe. “By setting unrealistic and politically-motivated long-term targets without a scientific basis, MEPs have taken a dangerous short-cut.”

And things are not likely to look any rosier for the car makers in the short term. One of the thorny issues which runs alongside the emissions limits is how those emissions are measured. The New European Driving Cycle test (NEDC) which produces the official figures for a car’s fuel consumption and emissions, is coming under increasing fire for being out of date and full of loopholes.

Recently it emerged that car makers are allowed to dramatically modify the vehicles put forward for the test, including the removal of equipment to save weight, the use of special oils to reduce friction and even sealing the car’s body openings with tape to improve aerodynamics.

Greg Archer, Cars Officer for environmental pressure group Transport Environment said that “The European Parliament has shown it wants to make real progress in reducing the fuel wasted in inefficient cars and ensuring cars deliver on the road similar efficiency to that achieved in tests.

The supercredits for selling electric cars are an accountancy trick and are not needed by carmakers to meet 2020 targets - but MEPs have ensured any weakening of the caused by supercredits target is limited. A more effective way to drive the market for electric cars is to set an ambitious target for 2025.

“Parliament’s proposal is an important milestone but still more ambition is needed drive the market towards zero-carbon vehicles. It’s clear the current fuel consumption test regime is not fit for purpose. Consumers’ trust in official information and regulation is breaking down, because what it really costs the consumer to run a car is a quarter more than the official test results say. The only way that trust can be restored is for the loopholes to be closed.”

According to Transport Environment’s research, the official fuel and Co2 figures can be as much as 25 per cent better than can be realistically achieved by an average driver. A new, more realistic test programme called the World Light Duty Test Procedure (WLTP) has been developed by the United Nations but its introduction is still several years away.

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